A Malaysian politician and ex-client of UBS was arrested and charged with graft. The charges against him threaten to revive a decade-old probe for the Swiss bank.
Malaysia anti-corruption officials arrested Musa Aman, a long-standing state politician who became one of the main losers of Malaysia’s election upset in May, on Monday, according to local press reports. The former governor of Sabah pleaded not guilty to 35 corruption charges over an alleged $63 million in bribes.
Aman is also in trouble in Switzerland: the Bruno Manser Foundation, a Swiss non-profit organization, lodged a criminal complaint against Zurich-based UBS in 2012. The NGO claims that the Swiss bank had helped Musa launder millions in ill-gotten funds. A spokeswoman for UBS didn't comment, and Swiss justice officials didn't immediately respond to a request for comment.
Probe in High Gear
The probe has long lain dormant, with Bern’s prosecutors cooling their heels because Malaysia wouldn’t offer legal assistance. That all changed with the May election upset which vaulted former long-standing Prime Minister Mahathir Mohamad back into power.
The investigation has kicked back into high gear since then, culminating in criminal charges for two ex-investment bankers and a Malaysian businessman over a $4.5 billion graft scheme at Malaysian state fund 1MDB, as finews.asia reported.
By contrast, the accusations levied against Musa Aman are more bland: he allegedly pocketed money in return for timber concessions in Sabah, a mountainous state on the northern tip of Borneo.
UBS Fought Probe
The politician is accused of depositing the bribes at UBS, HSBC, Credit Suisse, Citi, and J.P. Morgan. The accusations represent an unwelcome distraction from a long-ago client for UBS in particular.
The Zurich-based bank has put behind it a reprimand by Singapore 17 months ago over its involvement in the 1MDB probe. A revival of the Musa probe in Switzerland would bring the issue back to the fore.
UBS has fought deeper scrutiny by prosecutors to Switzerland’s highest court – unsuccessfully so, after a 2016 verdict. Switzerland’s various agencies – namely public prosecutor and banking regulator – have taken slightly different tacks in Malaysia. Switzerland's banking regulator, Finma, wrapped up its probe into UBS and Malaysia, without disclosing specifics.
Open Legal Wounds
The Bruno Manser Foundation, a Swiss non-profit group which lodged the 2012 criminal complaint, has maintained that the Musa Aman scandal may culminate in a criminal penalty for UBS.
The Swiss bank is currently fighting tax and money-laundering charges in a French criminal trial. This as well as UBS' appeal to keep its ability to sponsor initial public offerings in Hong Kong are among the bank's largest open legal wounds at the moment.
As for Musa himself, the 67-year-old politician initially dropped out of sight following the May election rout, but pledged to return to face investigators. His arrest comes just days before a court rules on whether the election results which ousted him were legitimate or not.
